The Trade-Development Nexus in the European Union

Differentiation, coherence and norms

Maurizio Carbone, Jan Orbie

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781138816701
• eBook ISBN:
  9781317596905
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This volume offers new perspectives on the evolution of the trade–development nexus in the European Union against dramatic changes in the international context. Without disregarding them, it seeks to go beyond the controversial and extensively researched Economic Partnership Agreements (EPAs). In particular, it focuses on the reform of the Generalised System of Preferences, the negotiation of various Preferential Trade Agreements, the application of trade sanctions, the allegedly ambitious agendas on decent work, Aid for Trade and aid untying, and the implications of the changing balance of power in global economic relations. Taking diverse approaches and, at times, reaching different conclusions, contributors directly or indirectly address one or more of the three general themes of the book: differentiation, coherence, and norms.

This book was published as a special issue of Contemporary Politics.

Beyond Economic Partnership Agreements: the European Union and the trade–development nexus

Maurizio Carbone^a and Jan Orbie^b

^aSchool of Social and Political Sciences, University of Glasgow, Glasgow, UK; ^bCentre of EU Studies, Ghent University, Ghent, Belgium

Without disregarding them, this volume seeks to go beyond the controversial and extensively researched Economic Partnership Agreements to offer new perspectives on the evolution of the trade–development nexus in the European Union against dramatic changes in the international context. In particular, it focuses on the reform of the Generalised System of Preferences, the negotiation of various Preferential Trade Agreements, the application of trade sanctions, the allegedly ambitious agendas on decent work, Aid for Trade and aid untying, and the implications of the changing balance of power in global economic relations. Taking diverse approaches and, at times, reaching different conclusions, contributors directly or indirectly address one or more of the three general themes that are discussed in this introduction: differentiation, coherence, and norms.

Introduction

Seismic shifts have occurred in the international arena in recent years. The financial and economic crisis in Western countries, the rise of emerging powers (most notably China, India, and Brazil), the enhanced agency of developing countries, and the increasing challenges of globalisation have influenced the European Union's (EU) trade and development policies. Moreover, the EU has undertaken a number of institutional reforms, most notably the ratification of the Lisbon Treaty, with the view to acting as a stronger and more coherent actor on the international scene (Niemann and Bretherton 2013, Smith 2013). In the context of these reforms, it has pledged to foster better synergies between its trade and development policies. This attention to the trade–development nexus is not new – linking the two policies has been an important concern since the Treaty of Rome – but what has changed is the way in which this nexus has been interpreted. For instance, when the Lomé Convention was signed in the 1970s, in the context of developing countries' increasing ‘commodity power’ and pleas for a New International Economic Order, the EU's trade and development arrangement with the African, Caribbean and Pacific (ACP) countries was seen as a model of North–South relations (Arts and Dickson 2004, Orbie 2007). Conversely, the 2000 Cotonou Agreement and its provisions on Economic Partnership Agreements (EPAs) witnessed the change in conventional wisdom on the benefits of trade liberalisation (Elgström 2000). For Young and Peterson (2013), the interaction of the two policies since the beginning of the new century has generated a paradox: on the one hand, a greater emphasis on trade as a tool for development, with particular attention to the concerns of those most in need; and on the other hand, a number of policy initiatives, for instance the conclusion of trade agreements with emerging markets, which have adverse consequences for them.

Against this background, this volume seeks to offer fresh insight on the evolution of the trade–development nexus in the EU. Though we cannot disregard this contentious issue, our intention is to go beyond the EPAs, which has been the almost exclusive focus (cf. Faber and Orbie 2007) of studies that have examined the interaction between the EU's trade and development policies (Storey 2006, Elgström and Pilegaard 2008, Faber and Orbie 2009, Di Caprio and Trommer 2010, Elgström and Frenhoff-Larsen 2010, Ngangjoh-Hodu and Matambalya 2010, Hurt 2012, Langan 2012). The reason is not only that they have already been extensively researched, but also that the EPA agenda, having been outlined at the end of the 1990s, predates the above-mentioned seismic changes. Thus, several other key issues are dealt with in this volume, most notably the reform of the Generalised System of Preferences (GSP), the conclusion of Preferential Trade Agreements (PTAs) with different types of countries and regions, the controversial application of trade sanctions, the allegedly ambitious agendas on decent work, Aid for Trade and aid untying, and the implications of the changing balance of power in global economic relations. Considering the variegated nature of these issues, we decided not to impose an overarching framework on contributors, but to leave them free to choose the theoretical debates with which they wished to engage and to which they wanted to contribute. Taking diverse approaches and, at times, reaching different conclusions, they directly or indirectly address one or more of the three general themes that are discussed in the remainder of this introduction: differentiation, coherence, and norms.

Differentiating against a fast-changing context

The EU has placed differentiation – that is, tailoring trade and development policy to match the level of development and development needs of its partners (Woolcock 2014) – at the centre of its trade–development strategy. In the area of development (assistance), the rise of emerging powers and the changing geography of global poverty (with three quarters of the world's poorest people living in middle-income countries) have stimulated a contentious debate as to the future of development policy and the appropriate policies towards different types of countries (Sumner 2012). Thus, with the 2011 Agenda for change (Council of the European Union 2012) the EU has proposed a new focus on ‘differentiated development partnerships’ and redirecting its aid to poorer countries. In particular, this means that development assistance will have to be phased out in about 20 middle-income countries. This proposal has raised doubts in that differentiation is based on income differences between countries rather than income distribution, and, thus, it fails to take into account inequality (Koch 2013). More generally, the commitments on aid volume and aid effectiveness (Carbone 2013a) have been complemented by a stronger emphasis, although with disappointing results, on ‘policy coherence for development’ (PCD): a number of non-aid policies are seen as having an equal, if not higher, impact on developing countries (Carbone 2008). At the same time, development policy is becoming more integrated into broader EU external relations (Gänzle et al. 2012, Carbone 2013b). This could entail a stronger EU-wide commitment to development, but it could also mean that development considerations will become overshadowed by ‘superpower temptations’ (Orbie 2012).

In the case of trade policy, the 2012 Trade, Growth and Development strategy (European Commission 2012) has stipulated that trade policy should be ‘tailored’ for ‘those countries most in need’, with trade preferences seen as a crucial instrument in the fight against poverty. These countries include Least Developed Countries (LDCs) and ‘vulnerable economies’ (that is, countries lacking product diversification and poorly integrated in the global economy), and those countries covered by the Everything but Arms initiative and various GSP + schemes (e.g. countries that sign up to a series of conventions on core human and labour rights, protecting the environments and other good governance standards). More generally, shifting away from the previous ‘harnessing globalisation’ discourse (Meunier 2007), the EU has brought economic interests to the core of its external trade agenda (Heron and Siles-Brügge 2012). Thus, faced with the stalled World Trade Organisation (WTO) negotiations and pressures for competitive liberalisation from the USA and Asian countries, it has placed more emphasis on trading with emerging powers rather than developing countries (European Commission 2006). Interestingly, the financial and economic crisis has not halted this tendency, but has instead further reinforced the perceived need to foster free trade (De Ville and Orbie 2014).

In this volume, the issue of differentiation is directly addressed by Woolcock (2014). After systematically assessing the substance of EU trade policy towards a number of partners at different levels of development, he concludes that the EU's PTA policy exhibits differentiation within a general shift towards reciprocity vis-à-vis developing countries and that this needs to be assessed as much at the level of specific policy areas as of partner country. He also argues that commercial competition and sector interests are relatively more important in PTAs with emerging markets and high-income developing countries, whereas norms and institutional factors are relatively more important in shaping those with least-developed or low-income developing countries. Ahnlid and Elgström (2014) show how differentiation has also figured in the EU's discourse in the context of the Doha Development Agenda. In particular, the EU was ready to make concessions to the group of developing countries, but called on emerging powers to shoulder responsibility, liberalise their markets, and contribute to the development objectives of the Doha round (Young 2011).

Differentiation, Siles-Brügge (2014) argues, has also inspired the recent GSP reform, which excludes high- or upper-middle-income countries from being the beneficiaries of EU trade preferential treatment and makes it easier for GSP imports to be graduated. The explanation for the rapid acceptance of this reform rests in the fact that it could appeal to three different groups within the EU that have divergent ideas and interests in relation to the trade–development nexus: protectionists, idealists, and free traders. In the context of the economic crisis, protectionists could be comforted that the new regulation limits imports from major competitors. At the same time, EU discourse emphasises the developmental benefits of the reforms, since trade preferences are henceforth reserved for the poorer countries. In addition, free trade-oriented actors can see merits in the GSP's eligibility restrictions because these provide a strong incentive for third countries to engage in free trade agreements in order to safeguard their access to the European market (see also Bilal et al. 2011, Stevens 2012).

Policy coherence and international development

The issue of policy coherence has attracted significant interest in the field of EU studies. When applied to the area of external relations, the central concern seems to be the impact of the EU's action and, closely related to this, how the EU gets to speak with one voice. When applied to the area of international development, the central concern is that the needs and interests of developing countries are taken into account when the EU makes and implements policies. Scholarly attention has concentrated on the former (Gebhard 2011, Portela and Raube 2012, Thomas 2012, Bretherton and Vogler 2013), while the latter has attracted limited interest (Carbone 2009, Gänzle et al. 2012). This is a serious oversight, particularly because the two do not necessarily pull in the same direction. In particular, the promotion of PCD has been an explicit commitment for the EU since the Treaty of Maastricht, yet it was only in the mid-2000s that it was placed high on the EU agenda. Achieving PCD is considered a sort of ‘mission impossible’ (Carbone 2008), because it involves the simultaneous interaction of institutions, ideas, and interests. A classical distinction is between horizontal coherence, referring to the synergies (or lack of them) between two (or more) policies, and vertical coherence, referring to the (potentially conflicting) interactions between the EU's supranational level and the Member States. Existing literature has paid attention to clashes within the European Commission between Directorate General (DG) Development (renamed DG Devco) and DG Trade (Van den Hoven 2007, Holland and Doidge 2012), and between the European Commission and Member States both in trade (Kerremans 2004, Meunier and Nicolaidis 2006, Elgström and Frenhoff-Larsen 2010, da Conceição-Heldt 2011) and development policies (Carbone 2007, Gänzle et al. 2012, Orbie and Lightfoot, forthcoming).

A number of contributions in this volume address the issue of horizontal coherence. With regard to public procurement, Carbone (2014) contrasts DG Development's ‘pro-poor’ view with DG Trade's focus on export potentials for EU businesses. In the case of the Aid for Trade agenda, Holden (2014) laments the lack of a comprehensive vision of how to link trade and development policies, and highlights the presence of tensions between different discourses within the European Commission, notably regional integration, free market, and pro-poor discourses. ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• Citation Information
• Notes on Contributors
• 1. Beyond Economic Partnership Agreements: the European Union and the trade–development nexus
• 2. Trading in development: norms and institutions in the making/unmaking of European Union–African, Caribbean and Pacific trade and development cooperation
• 3. Decent work and indecent trade agendas: the European Union and ACP countries
• 4. Differentiation within reciprocity: the European Union approach to preferential trade agreements
• 5. EU trade and development policy beyond the ACP: subordinating developmental to commercial imperatives in the reform of GSP
• 6. Sanctions under the EU Generalised System of Preferences and foreign policy: coherence by accident? 63
• 7. Challenging the European Union: the rising powers and the USA in the Doha Round
• 8. Tensions in the discourse and practice of the European Union’s Aid for Trade 90
• 9. Much ado about nothing? The European Union and the global politics of untying aid
• 10. The value of pointillism? Integrating trade and development and the European Union as a global actor
• Index